Silicon Valley Hikes Wireless Frontier

[Dave Farber <dave () farber net>]

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From: Dewayne Hendricks <dewayne () warpspeed com>


April 7, 2003
Silicon Valley Hikes Wireless Frontier
By STEVE LOHR
<http://www.nytimes.com/2003/04/07/technology/07CELL.html>

Eric Engstrom spent seven lucrative and exhilarating years at
Microsoft - working on big projects, making a name for himself, even
testifying on the company's behalf in its federal antitrust trial.
But in 2000, Mr. Engstrom walked away from Microsoft and the personal
computer industry, which seemed to have settled into maturity. He
founded his own company and set off to pursue innovation and riches
elsewhere.

"The opportunities are out on the edge, and the edge of software
development has got to be the phone," said Mr. Engstrom, 38, the
chief executive of Wildseed, a start-up in Kirkland, Wash.

Mr. Engstrom personifies the migration of talent, excitement and
investment in computing toward the wireless business as cellphones
become more like computers and hand-held computers morph into phones.
To veterans of past cycles in technology, the wireless world today
has the look of the personal computer business in the late 1970's or
the Internet in the early 1990's.

"It's starting to happen, it's getting exciting again," observed
Esther Dyson, who plays host to PC Forum, an annual gathering of
technology executives, entrepreneurs and venture capitalists that was
held late last month in Scottsdale, Ariz. PC Forum began in 1977. But
now the PC stands not for "personal computer" but "Platforms for
Communication."

The economics of wireless is still unclear and technology standards
are not yet in place. Nor does the move to wireless computing spell
the death of the personal computer, any more than the rise of the PC
meant the demise of the mainframe computer. But as wireless telephony
and computing combine, the center of gravity in digital technology is
clearly shifting.

"People see the PC as played out, and they are looking for new
technology platforms to build new businesses on," said Brad
Silverberg, a former senior Microsoft executive who left three years
ago and is the founder of Ignition, a venture capital firm that has
invested in wireless businesses, including Mr. Engstrom's start-up.

The wireless convergence of phones and computers is made possible by
steady progress in chip making, memory and miniaturization. Today's
advanced cellphones have the equivalent computing power of the
desktop PC's of the mid-1990's.

Yet while the trend of advancing technology is clear, little else is
apparent. What companies, products, services and technology standards
will emerge as leaders in the wireless arena is still uncertain. And
that is because the real competition has barely begun.

More than 450 million cellphones will be sold worldwide this year,
industry analysts predict. But less than 10 percent of those will be
the cellphone-computer hybrids - sometimes called smart phones - that
can handle not just short text messages, but also send and receive
e-mail, display color photos and video, play music and games with
rich graphics, and browse the Web.

"These hand-held smart phones are the frontier, but we're just
getting to the point where they are beginning to be widely
distributed," said Berge Ayvazian, president of the Yankee Group, a
research firm.

The wireless computing field today resembles the PC business a
quarter of a century ago: people were excited by the opportunities,
technology standards were not yet established, start-ups proliferated
and many failed as the economy was in doldrums.

"It feels eerily similar in some ways," said David Nagel, a former
executive at Apple Computer and now the chief executive of
PalmSource, whose Palm operating system is used on some smart phones.
"But this new era in computing is much more complicated."

<snip>

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